Making the case for ALMOs

Which is the first housing body to have its ‘housing manifesto’ ready for the coming election campaign? Hats off to the National Federation of ALMOs, which published its manifesto this week, making the case for investment in council housing and specifically for the added value given by arms length management companies.

ALMOs have had a rough time under the coalition government, both because it ended their preferential treatment for decent homes finance, and because it cut the amounts available to tackle existing backlogs. Some ALMO authorities lost out on money they hoped to receive, while non-ALMO councils were helped (to some extent) when they no longer expected it. All lost though from the fizzling out of any real target to get all social housing up to the full standard, and even more so because Labour’s plan for a higher ‘Warm Homes’ standard was ignored.

Even so, despite some councils like Sheffield taking housing management back in-house, and others like Bolton and Rochdale effectively transferring their stock to their ALMOs and losing their control over it, ALMOs are now enjoying a minor resurgence. In November, Northampton Council announced that it would set up an ALMO to manage its stock, which if it goes ahead will mean it joins a handful of others to have created new ALMOs, despite there no longer being any link to decent homes funding. One of the main attractions is that, as standalone companies, ALMOs have more freedom to make efficiency savings, and indeed where councils have entered new, long-term contracts with their ALMOs (like Derby), it has usually been because their efficiency saves more than the extra costs of having a separate company.

The NFA manifesto plugs this case, of course, but also argues that ALMOs can do much more.  They have branched out into managing private rented properties on behalf of landlords (thus helping to guarantee minimum standards), created training schemes and apprenticeships to tackle worklessness, addressed financial exclusion among tenants, as well as a host of other added-value activities.

ALMOs have not been resting on their laurels with the existing stock, in many cases improving it beyond the Decent Homes Standard, especially in terms of energy efficiency. The manifesto calls for something not unlike Labour’s Warm Homes standard, arguing for all council stock to have an energy-efficiency (‘SAP’) rating of at least 70 by 2020, with no stock falling below a rating of 40. This could only be done with financial support beyond the current ECO programme, which has in any case recently been cut back.

But the strongest case comes in contributing to new build. ALMOs have already added over 2,000 homes to their councils’ stock, and have plans to build 3,000 more over the next five years. They’ve often done this by taking advantage of small sites, old garage schemes and other opportunities within their estates, where effectively only the landlord can build new homes. It goes without saying that to do so requires detailed negotiation with tenants so that newly built houses meet local needs.

Which leads to the manifesto’s key recommendation, of no surprise to Red Brick readers, that the borrowing caps that hold back council housing investment must be raised.  The manifesto leaves open whether this should be done by raising the caps and relying on prudential borrowing rules alone, or whether there should be a rule change to make the caps unnecessary. Needless to say, either would be very welcome. Presumably, the Lib-Dems may well adopt it as policy as they have in the past. But will we have a party in power in 2015 that is actually willing to make this critical reform?

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